Archive for April 14th, 2009

Beyond Crime and Punishment

Tuesday, April 14th, 2009

Jacob Bronowski speaking in 1976 his famous public television series the Ascent of Man
said:  “One aim of the physical sciences has been to give an exact
picture of the material world.

One achievement of physics in the
Twentieth Century has been to prove that that aim is unattainable.
There is no absolute knowledge and those who claim it, whether they are
scientists or dogmatists, open the door to tragedy.

All information is
imperfect. We have to treat it with humility.

This is the human
condition; and that is what Quantum Physics says. I mean that
literally. Let us examine an object with the best tool we have today,
the electron microscope, where the rays are so concentrated that we no
longer know whether to call them waves or particles. Electrons are
fired at an object, and they trace its outline like a knife-thrower at
a fair. The smallest object that has ever been seen is a single atom of
thorium. It is spectacular. And yet the soft image confirms that, like
the knives that graze the girl at the fair, even the hardest electrons
do not give a hard outline.

The perfect image is still as remote as the
distant stars. We are here face to face with the crucial paradox of
knowledge. Year by year we devise more precise instruments with which
to observe nature with more fineness and when we look at the
observations, we are discomfited to see that they are still fuzzy, and
we feel that we are as uncertain as ever.

We seem to be running after a
goal which lurches away from us to infinity every time we come within
sight of it.” …

Timothy Wilken, MD writes:
In our present world, it is widely believed that mistakes are the
result of badness. So when mistakes occur, we investigate, blame and
punish. This belief has resulted in a world where violence, hate and
judgment are common.

Synergic science reveals that mistakes are in fact
the result of ignorance. If we understand this, then when a mistake
occurs, we would analyze, determine responsibility, and educate. This
could soon lead to a world where public safety, love and compassion are
common. …

Our human science has revealed that our knowing is
incomplete and imperfect.

This means that every human belief is an
assumption. We can never know for sure. We can never know ALL.

As you
sit in your chair reading these words, you assumed the chair would hold
you. You did not check under the chair to see if it had broken since
its last use. When you ate lunch at your favorite restaurant last week,
you assumed the waitress had washed her hands. You assumed the cook did
not have hepatitis. If you had assumed otherwise, you would not have
walked into that restaurant. You would not have eaten your lunch.

We
humans assume. Herein lies our uncertainty — that’s all we humans can
do. There is nothing wrong in our assuming, we are simply obeying a
fundamental ‘law’ of Nature. But we need to know that we are assuming  (04/14/09)
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Peak Oil 2009

Tuesday, April 14th, 2009

Matthew SimmonsMatthew Simmons Interview: Do you recall when you started studying the peak oil story?  It was sometime in the 1990s?

Simmons: I wasn’t studying the peak oil
story then.  In 1989, I began pondering-as it was clear to me that the
worst was over in terms of the smashed rig count-when it would have a
deleterious impact on oil supply in the US.  At that time, it hadn’t
had nearly the detrimental impact that I would have thought.  We
started running correlations of wells drilled vs. reserves added.  It
appeared that there was a two- or three-year lag; there’s almost a
perfect correlation of when the decline startsÖ That’s when I realized
how few people knew that if you don’t drill, it eventually shows up. 
Then in the early 1990s I started hearing the first of what became a
loud chorus of commentators about how modern oil-field technology had
been the game-changer-that we only needed one rig for what we used to
do with 8 rigs because of horizontal drilling.  And because of 3-D
seismic we no longer drill dry holes.  Since our firm did all the
investment banking in all those technologies, I felt ‘what an
unadulterated bunch of baloney.  None of this is true.’  That’s when I
started realizing that few people in the industry really appreciated
what decline rates were.  So I spent an enormous amount of time during
the 1990s trying to analyze depletion data: the rates of decline.  As
the fields started using those technologies, the decline rates
accelerated. 

At that point I still didn’t understand what the peak oil issue was
all about because I automatically assumed that we had so much oil in
the Middle East that we’ll never have peak oil.  But I thought if we
don’t spend a ton of money in the Middle East, we’ll have peak
capacity.  And what’s the difference?  We have it in the ground but we
can’t use it.  So it was probably when I started doing the study on the
world’s giant oil fields that I started glimpsing maybe the Middle East
is an illusion too.

What are the big differences between the demand drops post-1978 and today?

Simmons:  They’re as comparable as the Crimean War and the
Vietnam War.  I recently heard Leo Drollas and Ed Morse presentations
in which they lamented that “we should have learned from 1979 that high
oil prices kill demand: they always have, they always will.” I have
told people over the last few months that today has no earthly
resemblance to what happened in 1979.  When oil prices were still
rising in 1979, the world was seriously rolling out the only new form
of energy in the 20th Century-atomic energy.  It had been
building for 15 years and that wasn’t in response to $30 oil.  In 1979,
we were still bringing in oil from three of the last great frontiers,
all discovered in 1967-69: Western Siberia, the North Slope of Alaska,
and the North Sea. High oil prices kept those expensive projects
afloat. 

Crude oil demand grew from 46 million b/d in 1970 to its
then-all-time high of 62.7 mb in 1979.  The enormous swing in
price-from $2 a barrel to $35 a barrel, from 1970 to 1979-didn’t slow
demand.  By 1983, demand did drop to 53.3 million b/d.  The four major
demand reduction drivers were fuel-switching to nuclear, fuel-switching
to coal, vehicle efficiency and off-shoring heavy industry.  So only a
fraction of the decline in demand came from what everyone has said for
two generations: “high oil prices workedÖconsumers changed their
habits.”

With respect to demand today, some of the OECD countries are now
very mature and haven’t been growing their populations or economies. 
Japan and parts of Europe are pretty gray, pretty mature, so we
shouldn’t be expecting robust growth in either their economies or in
oil demand.

 Over the course of the 12 months preceding the price collapse, when
we had oil going from $70 to $145 and backing off to $120, we had only
a deminimus change in a few of our key demand markets for oil, even
though we were capping off a decade-long rise of 15-fold in oil prices.
That’s a little reminiscent of the 1970s, when oil prices rose 10-fold,
though demand rose until the end.  The higher that oil prices went last
year, the more that people who had staked their careers betting this
would never happen said “supply is going to soar, and demand must be
falling.”

Along came June-July-August numbers out of the EIA, which are the
only sort-of-reliable near-term estimates we have on demand.  People
started to observe that we’ve finally seen a crack in gasoline demand,
starting to decline year-over-year.  All sorts of stories started
circulating how gasoline demand has finally turned down for the first
time since 1990. 

In July in Maine, which is peak tourist season, many of the gas
stations we passed were down to one pump in operation.  When I asked
why, I was told their supply was being allocated, restricted.  At least
one of the distributors had small gas stations on credit watch, since
they were lending them product to the tune of $400,000, leading to
large exposure for skinny margins.  So they were limiting supply to
avoid write-offs from dealers that might go bust. 

In the spring of 2007, I spoke with Linda Cook at the EIA event in
April.  I said that with gasoline stocks at such unbelievably low
levels, we need to be concerned about potential shortages leading to a
panic that people would respond to by  topping up their tanks, which
could dry the system dry in two or three days.  I asked her if they had
ever considered this, and the need to possibly print up rationing
tickets.  She did, and said she was laughed at-”Linda, you’re
hallucinating.” She said she had been noticing that at service stations
in the Beltway area, when she looked at the last purchases on the
pumps, a lot of them were at $5 or $10, rather than filling up.  People
were driving around with just-enough gasoline in order to avoid having
to pay for a full tank.  Last summer, AAA reported that they had a 17%
increase in their use of tow trucks for people who had run out of gas.

Then came September, and we had the big collapse, because we had two
back-to-back hurricanes.  Right after Ike hit, Houston was without
power for the better part of two weeks.  Refineries, with their own
generators, were without power just long enough that we had service
stations with outages that spread all across the south, as far up as
Maryland.  Only the Atlanta part of the story was covered, other than
by local news, because the national news was being totally dominated by
failures of Lehman Bros., AIG, Merrill Lynch, etc.  Had we not had the
financial meltdowns, those other stories would have been covered, then
motorists would probably have topped up their tanks and we would have
run out of gas. 

EIA’s weekly data in September was total junk because nobody was
around in the Gulf Coast to measure it.  In late October, by the time
they released their monthly report for September, it showed a gasoline
decline of 11%.  People were saying, “high prices started this
avalanche, but it’s cascading.”

At the recent Yamani Conference, Paul Horshnell, who does a fabulous
job, said that we’ve seen the worst of the demand destruction in the
US, which clearly had to be impacted by the hurricanes.  But when you
look at the IEA’s demand drop for 2009, two-thirds is coming from the
US, based on the assumption that the third quarter wasn’t an aberration
but a trend.  Yet if you look at gasoline consumption over the last
five months, gasoline consumption is up 2%, then down 2%, then up
again.  Diesel fuel is still down about 10%, but most of that is
exports.  Then jet fuel is down 10%. Relative to the price collapse,
you would expect a major drop as opposed to the modulation we’ve
seen.   It’s more or less unchanged, vs. a headline story.

But what I’m now sure of is that, in North America-in the only easy
place in the world to stop drilling-we have stopped drilling. 
Hopefully we’re getting towards the bottom of the decline, but the
decline has been savage.  Around the rest of the world, we’re slowing
down every planned project that is supposed to be getting started, and
a lot of things needed to complete ongoing projects are being put on
hold.  There is an enormous effort by the major oil companies to use
this low-price environment to finally get oil services inflation under
control.  While there is a lot of lip service going around that their
budgets remain unchanged, the fact of the matter is that they’re
killing their contractors. BP apparently sent out a letter to all their
suppliers saying “BP has a large budget for this time of year, but if
you want part of it drop your costs by 30%.”  (04/14/09)
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Remember Tuna?

Tuesday, April 14th, 2009

Bluefin TunaWorld Wildlife Fund (WWF) — Overfishing will wipe out the breeding population of Atlantic bluefin
tuna, one of the ocean’s largest and fastest predators, in three years
unless catches are dramatically reduced.

As European fishing fleets prepare to begin the two-month Mediterranean fishing season on Wednesday, WWF said its analysis showed the bluefin tuna that spawn — those aged four years and older — will have disappeared by 2012 at current rates.

“For years people have been asking when the collapse of this fishery will happen, and now we have the answer,” said Sergi Tudela, Head of Fisheries at WWF Mediterranean.

The fish, which can weigh over half a ton and accelerate faster than a sports car, are a favorite of sushi lovers. Demand from Japan has triggered an explosion in the size of the Mediterranean fleet over the past decade and many of those boats use illegal spotter planes to track the warm-blooded tuna.

“Mediterranean (Atlantic) bluefin tuna is collapsing as we speak and yet the fishery will kick off again tomorrow for business as usual. It is absurd and inexcusable to open a fishing season when stocks of the target species are collapsing,” added Tudela.

Environmental groups condemned an agreement signed in November by states setting bluefin quotas — a body dominated by EU members. The groups called it “a disaster” and “a disgrace,” saying the states again chose to ignore their own scientists and set quotas 47 percent higher than recommended.

Illegal fishing is also rife for the bluefin, the dried, dark red meat of which once fed Roman armies on the march.

Growing numbers of restaurants and retailers including Carrefour’s Italian supermarkets are boycotting it.

WWF said that analysis of official data showed the average size of mature tunas had more than halved since the 1990s and that this has had a disproportionately high impact since bigger fish produced many more offspring.

The bluefin can only be saved by a complete halt to fishing in May and June as the fish rush through the Straits of Gibraltar to spawn in the Mediterranean. (04/14/09)
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Activists thwart Japan Whale Hunt

Tuesday, April 14th, 2009

A Minke Whale caught by JapaneseBBC Life Science & Politics — Japan’s annual Antarctic whale-hunting season has fallen short of its target catch because of disruptions by anti-whaling activists, officials say. Japan’s Fisheries Agency said its fleet had killed 679 Minke whales out of a planned 935, and just one Fin whale, despite a target of 50.

It partly blamed the disruptions on the Sea Shepherd Conservation Society, a US-based environmental group. Protesters had escalated their attacks on Japanese ships, the agency said.

The Fisheries Agency said 16 days of hunting were lost due to bad weather and confrontations at sea between activists and the six-ship whaling fleet. It added that several hunting ships were damaged in collisions or by chemicals thrown by the protesters.

Japan abandoned commercial whaling in 1986 after agreeing to a global moratorium. But its fleet continues to hunt whales in the name of scientific research, which is allowed under international rules.

Whale meat not used for study is sold for consumption in Japan - which critics say is the real reason for the hunt. The meat can be found in supermarkets and restaurants across the country. (04/14/09)
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Air Pollution Shortens Human Life

Tuesday, April 14th, 2009

BBC Environmental & Medical Science – A project by the Environmental Health Department at Harvard School of Public Health in Boston tracked the change of air quality in 51 American cities since the 1980s. During that time general life expectancy increased by more than two and half years, much due to improved lifestyles, diet and healthcare. But the researchers calculated more than 15% of that extra time was due to cleaner air.

“We think about five months of that is due to the improvement of air quality,” said Dr Douglas Dockery from Harvard School of Public Health, which undertook the research. He added that, due to the relatively clean air in the US, the impact was far larger than anticipated.

Dr Dockery said there were many factors which had an impact on life expectancy. But he added: “Clean or dirty air is something that is being imposed on you. You do have a choice on whether you smoke, drink, exercise or what type of food you eat. But you do not have a choice on what air you breathe.”

Dr Dockery believes that if his research was transposed onto the heavily polluted cities of the developing world, such as Beijing or Mexico City, the life expectancy impact would be far greater.

“We would be talking about several years,” he said. “Three to four years - a significant change in how long you live for. We looked at fine particles that penetrate deep in the lungs, those that are not caught in the nose and the mouth, and directly damage the blood vessels. Most of those come from combustion, from automobiles, diesel trucks and buses and power plants.” (04/14/09)
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The Coming Siege of Austerity

Tuesday, April 14th, 2009

James Howard KunstlerJames Howard Kunstler writes: It’s a curious symptom of the consensus trance zombifying the
American public and its auditors in the media that something like a
“recovery” is now deemed to be underway. And, as events compel me to
repeat in this space, it begs the question: recovery to what? To Wall
Street booking stupendous profits by laundering “risk” out of bad loans
with new issues of tranche-o-matic securitized paper? This I doubt,
since there isn’t a pension fund left from San Jose to Bratislava that
would touch this stuff with a stick, even if it could be turned out in
collector’s editions of boxed sets. Does it mean that American
“consumers” (so-called) are awaited momentarily in the flat-screen TV
sales parlors with their credit cards fanned-out like poker hands,
ready for “action?” Not too likely with massive non-performance out in
cardholder-land, and half the nation’s electronics inventory wending
its way onto Craig’s List. Are we expecting more asteroid belts of new
suburbs carved in the loamy outlands of Dallas and Minneapolis,
complete with new highway strips of Big Box shopping and Chuck E.
Cheeses? Go to banking’s intensive care unit and inquire (if you can)
among the flat-lining production home-builders and the real estate
investment trusts on life support when they expect to rev up the heavy
equipment.

The idea that we’re about to resume the insane
behavior that induced the current epochal malaise of economy is so
absurd it will only be heard in the faculty dining halls of the Ivy
League. And if America is not picking up where it left off eighteen
months ago — the orgy of spending future claims on wealth unlikely to
accrue — then what is our destiny? Based on what’s out there in the
organs of public thinking, it seems that we don’t want to think about
it.

So many forces are arrayed against a return to the previous
“normal” that we will be lucky, in another eighteen months, to still
find ourselves speaking English and celebrating Christmas. What’s “out
there” is a panorama of mutually reinforcing critical problems
pertaining to how we live on this continent. Like the obesity, heart
disease, and diabetes that plague the public, these problems are
disorders of lifestyle habits and the only possible “cure” is a
comprehensive revision of lifestyle. With the onset of spring weather
and the cheez doodles and monster truck rallies and Nascar tailgate
barbeques and the drive-in beer emporiums all beckoning, can the public
public shift its attention from these infantile preoccupations to
saving its own ass?

So far, the most striking piece of the
economic fiasco is the absence of any galvanizing spirit among the
millions getting crushed in the tragic unwind of our relations with
money. It will be interesting to see, for instance, if there is any
uproar over the evolving story of Goldman Sachs’s latest raid on the US
Treasury, after booking billions in taxpayer-funded payouts funneled
through AIG, based on double-hedged credit default swaps. Such magic
tricks are understandably hard to follow, but a dozen-or-so federal
attorneys with a middling background in differential calculus might
suss out the trail that leads from Ben Bernanke’s work station to Lloyd
Blankfein’s cappuccino machine. …

So many dire elements are ranging around our food production
system (i.e. farming), from widespread drought and water table
depletion to “input” shortages (especially fertilizers) to sickness in
credit availability, that we’re all one bad harvest away from something
that will make Pieter Bruegel-the-elder’s “Triumph of Death” look like
Vanity Fair’s annual Oscar Party in comparison.

Barack Obama,
charming as he is, had better drop his pretensions about kick-starting
the old consumer economy, fire the Wall Street clowns and parasites who
are running that futile exercise, and start preparing a US Lifeboat
Economy aimed at reducing the scale and scope of our outlays so we can
survive the coming siege of austerity. Meanwhile, I’m glad that he
finally got a dog for the White House, because the President knows
full-well where to turn in Washington if you want some genuine love and
affection. (04/14/09)
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